Fidelity's Alva Devoy

A new report from fund manager Fidelity has identified four types of financial advice clients and sorted them into ‘navigation’ types that planners can purportedly use to help tailor their advice proposition.

The study categorises character traits, predilections and common desires that Fidelity say can provide a framework that advisers can use to communicate more effectively with their clients.

“Fidelity has called them navigation styles – which I think is very clever,” says Jason Andriessen, a managing director at CoreData. The research and analytics consultancy helped develop the report, which was based on survey responses from over 2000 respondents.

The four ‘navigation’ styles, according to the report, are as follows:

  1. Celestial navigators – Focus on competency and trust to solve their specific complex jobs to be done. Big picture thinkers.

“These are people who value competency and capability more than anything else,” Andriessen explains. “They’re generally older, wealthier and have more complex circumstances than most.”

  1. GPS navigators – Focus on evidence of value for money and transparency in costs/benefits. Want here-and-now issues pinpointed with accuracy.

“We’re seeing GPS navigators more and more since the royal commission,” Andriessen says. “They’re not necessarily keen to minimise costs, they want transparency and clarity. They want to cut through the noise.”

  1. Radio navigators – Focus on building rapport and evidence of positive client reviews. Require more intuitive guidance, with human interaction.

“These are generally male and a bit younger,” he says. “They want someone they can play golf with, have a coffee with; it’s all about rapport and the relationship.”

  1. Compass navigators – Focus on low/scaled fees and personal referral through family and friends. Want to be pointed in the right direction.

“These people are a bit younger and haven’t built their wealth yet,” Andriessen says. “They prefer to consume advice on a piece-by-piece basis. Interestingly, they’re probably the children of celestial navigators.”

The majority of clients are considered either GPS (42.1 per cent) or Celestial navigators (30.9 per cent), the report states, while Radio (11.4 per cent) and Compass (15.7 per cent) navigators are less common.

According to Fidelity managing director, Alva Devoy, the fund manager’s style of client classification can help advisers understand what motivates people to seek or advice. It can also show what people are looking for in advice relationship and guide advisers on how to interact with client types.

“By better understanding these issues advisers have the best chance of developing and delivering a service that not only addresses the individual’s mechanical or technical financial needs, but also aligns with their overall needs,” Devoy says.

By Andriessen’s own admission, the classifications are linked to life stages and common personal predilections advice clients cycle through that financial planners would already be familiar with. He argues that the system is a useful tool for advisers, however, as long as they “revisit from time to time to see if people are shifting”.

“An adviser will be more efficient if they can lead with the client knowing that they are one of those four things,” he says, noting that tools like question sets could be configured to match specific navigation styles.

Advisers could evolve to specialise in certain navigation styles, he says, depending on their skill set and personality type.